When a two-bedroom condominium on the Far North Side was offered recently at a Franklin County
sheriff’s sale, silence filled the room.

“Going once; going twice,” declared the auctioneer when no one placed the minimum bid of
$25,000.

“No bid; no sale.”

Such a scene has been increasingly common the past few years as foreclosed properties fail to
attract even the minimum bid from investors or banks. Ohio law currently requires that bidding
begin at two-thirds of the property’s value, as determined in a sheriff’s appraisal before the
sale. But a growing number of officials are calling for an end to the minimum-bid process to get
foreclosed properties out of the courts and into private hands.

Legislation is expected to be introduced this summer to eliminate the minimum bid for some
properties, and the Federal Reserve Bank of Cleveland also has called for an end to the policy.

Thomas Fitzpatrick, an economist with the Federal Reserve Bank’s community-development
department, said the law is outdated and hindering recovery of neighborhoods wracked by
foreclosure.

“Why not open up the auction to allow them to bid to where they want and bring a price that’s
more reflective of what the market will bear?” Fitzpatrick said. “If you do get more investors and
end users, it will cut out the time the property sits vacant. It will help the neighborhoods.”

Columbus City Attorney Richard C. Pfeiffer Jr. said he is working with state Reps. Cheryl
Grossman, R-Grove City, and Michael F. Curtin, D-Marble Cliff, to change the law.

“Let properties sell for what the market says it is worth,” Pfeiffer said. “We’ve got to figure
out how to move properties more quickly through the foreclosure process.”

As foreclosures have blanketed neighborhoods, some properties have lost so much value that even
the loan holders show no interest in reclaiming them.

Although most foreclosed properties are still bought by lenders, the number of Franklin County
homes that have received no bids at sheriff’s sales has leapt in the past five years, from 162 in
2008 to 515 last year. That doesn’t include hundreds of properties that banks foreclose upon but
don’t have enough interest in to even request a sheriff’s sale.

While some of the properties come back to sheriff’s sales, others sit in a sort of limbo —
foreclosed upon by banks but still in the name of the borrower.

Private investors say those properties would have an audience if the minimum bid were
removed.

“ It would bring a lot more people to the sheriff’s sale,” said Steve Zehala, president of the
Columbus Real Estate Investors Association. “This would open up a tremendous amount of activity on
the properties.”

Investors at a recent auction agreed that the law should be changed, partly because they believe
appraisals rarely reflect the property’s worth.

As one investor said: “Let the market speak.”

Eliminating the minimum bid also would allow counties to end the expense of appraisals.

Pfeiffer said he favors eliminating the minimum bid on blighted properties, but he would allow
only pre-approved investors to bid so that properties would not be acquired by those unable to
maintain them.

He favors keeping the minimum bid for nonblighted properties, but those that fail to sell would
be automatically offered again without a minimum bid.

Grossman said she and Curtin expect to introduce legislation addressing the minimum bid before
the end of the month.

“When you have these nuisance properties, they are cancers in the neighborhoods,” Grossman
said.

Paul Bellamy, of the Cleveland-based nonprofit housing group ESOP, said he supports eliminating
the minimum bid if bidders meet guidelines, including having a person in the county responsible for
the properties.

But he said getting rid of the minimum is no “silver bullet.”

“The fact of the matter is, no one will really know what the consequences of that will be,” said
Bellamy, ESOP’s director of development and research. “In theory, it would get rid of this long
period of holding the property and allowing it to go further downhill, which is the pattern we see
so often up here, in Cleveland.”

Lenders can now ask that the minimum bid be lowered if the property fails to sell the first
time, said Bob Cornwell, executive director of the Buckeye State Sheriff’s Association.

Cornwell said sheriffs have not taken a position on the minimum bid. “It’s just always been that
way,” he said.